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Culture of export in France (2) ?

Traditionally, international commerce, settlements of subsidiaries abroad, joint ventures (“JV”), and mergers and acquisitions (“M&A”) are seen as opportunities only available to large companies.  All of these English originating terms have the tendency to scare modest and humble SME French managers to who the aspect of “international” seems unattainable.

And yet, the barometer created by CGPME[1] brings back the interest and motivation of French SMEs to advance their international involvement.  Despite the crisis, French companies hope to increase their turnover in profits by 90% within the years to come, primarily inEurope.

 The assets associated to export activity fromFranceare, in descending order: increase in turnover (43%), enhancement of the company’s image and promoting its expertise abroad (19%), develop a niche market (17%), develop an international presence (15%), develop new markets and find new claims (11%).

 Other advantages seen by French managers related to the development of export activity are as listed: in exporting to multiple countries, there is less of a risk of undergoing crises; the possibility to recover the costs of research and development, to sustain a more and more globalized clientele, to capture important markets of countries with strong growth, and to give products that have died in the French market fresh start abroad.

 So what are these obstacles mentioned in the first part of the article that give the impression that export culture really does exist in France, or at least that France is willing to develop, to democratize export?

 When French entrepreneurs were asked to provide causes of export difficulty, those surveyed responded as follows: customs and customs fees (23%), lack of information regarding the market (17%), language barrier (16%), regulation (14%), logistic and transport costs (12%).

 Administrative procedures, required documents, and customs requirements that vary depending on the country are, more specifically, considered as constraints on exporting abroad.  The settlement of bills by customers is uncertain and risky. Another major impediment is French ignorance of foreign languages and international business environment.  The euro is overvalued in relation to other currencies.  There is also a lack of time; exporting necessitates is a long term investment.  In certain countries, its purchasing power that is dissuasive. Lastly, knowledge of the market and of competition is difficult for some countries.

 Can these obstacles, stressed not only by SMEs but by the majority of entrepreneurs, be overcome by utilizingFrance’s advantages, French institutions, and the examples set by many French entrepreneurs whose daringness suggests thatFrancehas the necessary elements, including innovation, to boost its exports?

 That is to say that French service firms, either with general assistance abroad or with legal, regulatory, customs related, logistics, or tax advice have a role to play in supporting these entrepreneurs and give them confidence in their abilities.

 In this regard, French entrepreneurs are much more capable than they think. France’s legislative and regulation complexity give them the impression that they will need to face the same obstacles to successfully export abroad. It is true that customs, laws, regulations, and legal systems vary abroad (apart from the common European Union basis). Thanks to the complexity of the French system,France has an advantage in providing legal security to commercial transactions, as well as in “legally” training our minds into being more anxious and quick in adapting to foreign regulations.

 In conclusion, we note that many articles, commentaries, books, and studies regarding export mention Germany as being an example to follow regarding export effectiveness.  It is great to know, thatFrance has a partner, a neighbor to depend on when looking to be guided in export dynamism.  But this reference cannot preventFrance from its identity, from developing those strengths and qualities specific toFrance.

 

Written by Cecile Dekeuwer (c.dekeuwer@thelegalbloginfrance.com )

 Translated by Marisa Delchert

 


[1] CGPME (Confédération générale des petites et moyennes entreprises) is the French federation of the small and medium sized enterprises

 

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